Business Income Coverage

Protecting Your Business

Business Income Insurance

Business income insurance is business insurance that will replace lost income. Theft, wind damage, and fire damage can interrupt business operations, eliminating income. Business insurance can help during these times, allowing you to keep paying your expenses (such as monthly bills and payroll) while your business gets repaired or replaced. Many insurance policies include business income insurance, and you can increase coverage limits in response to specific risks.

You can increase coverage for your business income if you add endorsements to the policy. Consider adding endorsements to your policy if your business depends upon equipment, a physical location, or other property used to generate income. For example, a hair salon depends upon a physical location to do and use tools to serve their customers. Or, a software company that relies on both digital property and physical property to do business.

Useful terms to know when shopping for business income insurance include business cash flows, restoration time, actual loss, and service interruption. Also, the different coverages are only limited by add-ons, riders, and endorsements. Payout amounts you will receive are based on your records (income and expense), which you may keep off-site or keep them digitally.

When shopping for business income insurance coverage, know that it is often called extra expense insurance or business interruption insurance. Things typically covered by a business income insurance policy are profits, fixed costs, relocation costs, added training costs and commissions, and extra expenses (besides the fixed costs). Some coverages will also cover damages caused by a supplier�s inability to provide products to the business.

The benefits of purchasing business income insurance include lost revenue, covered rent or lease payments, relocation needs, employee wages, and outstanding loan payments. No business owner likes to think interruptions to their business will happen, costing them money.